Congenital Volkmann ischaemic contracture or neonatal compartment syndrome has rarely been discussed in the literature of dermatology. The condition often involves the upper extremity with cutaneous lesions, contractures and neuropathy. Because the lesions can be mistaken for other entities including necrotizing fasciitis, neonatal gangrene, congenital varicella, aplasia cutis congenita, amniotic band syndrome, subcutaneous fat necrosis and epidermolysis bullosa, dermatologists play a significant role in the diagnosis and, consequently, the treatment of the patient. We describe a premature newborn who had a unilateral, well-demarcated necrotic plaque with a central pallor at birth. The plaque extended circumferentially over the left forearm from the wrist to the elbow. Left wrist oedema, bullae over the fingers and flaccid paralysis at the wrist were also noted.